The Atlanta Braves, who won the 2021 World Series, had a very big year financially. Liberty Media, the company that owns the Braves, released the team's financials on Friday, and there were some big numbers in the profit column.
Do not believe the lie that baseball teams are not extremely profitable ventures. They are. And the financials of the Atlanta Braves, as @EricFisherSBG noted, illustrate that. A $104 million profit in 2021. A $6 million-per-game revenue stream. As a business, baseball is superb. pic.twitter.com/OXlMCdOKNn
— Jeff Passan (@JeffPassan) February 25, 2022
The financial report shows that the Braves surpassed the half-billion revenue mark for the first time, making $568 million over the whole of 2021. According to ESPN's Jeff Passan, the Braves make $6 million in revenue per game. The Braves' adjusted OIBDA — operating income before depreciation and amortization, a metric for assessing the economic performance of a sports team — showed $104 million in profit.
Commissioner claimed baseball teams were bad investments
The Braves' record revenue flies in the face of what MLB commissioner Rob Manfred said several weeks ago, in an attempt to convince the public that owning a baseball team isn't a profitable venture.
“We actually hired an investment banker, a really good one, to look at that very issue,” Rob Manfred, the commissioner presiding over a tense MLB lockout, said on Thursday at the conclusion of the owners meetings in Orlando, Florida. He was answering a very simple question: Is owning a baseball team a good investment?
“If you look at the purchase price of franchises, the cash that's put in during the period of ownership and then what they've sold for, historically, the return on those investments is below what you'd get in the stock market, what you'd expect to get in the stock market, with a lot more risk.”
According to Manfred, owning a baseball team is riskier and less financially profitable than playing the stock market.
The Braves' financial report makes that claim seem absolutely comical. But Manfred said it because the owners — who decided to lock out the players back on Dec. 2 — do not want to give the players a larger share of their obviously sizable profits. Just like they did during the return-to-play negotiations in 2020, they're crying poor, resisting giving the the players a larger piece of the profits they actually earn as workers.
The bigger picture
That enormous profit isn't even the full picture. There is likely a lot more hiding in those numbers than we're being told. The Braves are claiming that it takes over $300 million to run a baseball team after payroll, a figure that seems wildly inflated. There are also huge tax benefits to owning an MLB team that aren't shown in a financial report. According to a report from ProPublica last year, provisions in U.S. tax law allow teams to easily turn profits into losses and under-report their earnings, sometimes by tens of millions of dollars.
Plus, the Braves didn't even max out their possible attendance profits. Truist Park, where the Braves play, spent the first month of the 2021 season operating at partial capacity. It wasn't until May that they were cleared for full capacity games. And even then, they didn't sell out every game. According to ESPN, they had an average of 29,490 fans per game in 2021. Truist Park can hold 41,000 fans. And yet the Braves still had record revenue.
The Braves and the Toronto Blue Jays are the only MLB teams that release earnings reports. That's because they're both owned by publicly traded companies — the Braves are owned by Liberty Media, and the Jays are owned by Rogers Communications. The other 28 MLB teams aren't required to release reports like that, and they absolutely don't. If they did, we might discover how much money they actually make while Manfred claims that the billionaire team owners can barely make ends meet. Those are the kind of thoughts that keep owners up at night.